Bitcoin Recovery from the Stress Zone: Critical Metric Drops Below 40% Threshold
The metric measuring the unrealized losses of Bitcoin investors has dropped below the critical stress zone, indicating that market pressure has eased slightly.
While the price of Bitcoin (BTC) continues its volatile course in the cryptocurrency market, a noteworthy change is occurring in on-chain data showing investor profitability ratios. According to a recent analysis by CryptoQuant, 35.2% of the total supply on the Bitcoin network is currently in a state of unrealized loss. This means that approximately one-third of Bitcoins in circulation are being held in wallets at a value lower than their purchase price.
Upon examining the data, it is observed that this ratio tested the “deep stress” zone by rising to 42.2% at the end of June. The metric, which fell as low as 30.4% in mid-July, has settled at the 35.2% level with recent movements. During major bear market periods in the past, the initial testing of the 40% threshold usually brought about a consolidation process where the price stabilized for a while.
No Signs of Capitulation in the Bitcoin Market Yet
The chart in the analysis reveals that the real major danger in the market begins when unrealized losses exceed the 60% level. This level represents the capitulation zone, where investors lose hope and engage in mass selling. The current 35.2% rate indicates that the market is not yet under such immense stress, though risks persist.
The historical trend in the chart documents that the supply-in-loss ratio rose above 60% during major crashes, such as those in 2015 and 2019. The fact that current data remains below this limit proves that the market has not yet priced in the worst-case scenario. Specifically, the 40% and 60% levels are being tracked as key zones that will determine the market’s direction in the coming period. This data, reflecting investors’ cost basis, is of great importance for understanding the extent of potential selling pressure that may arise on the Bitcoin price.